Asia Trade Talks Stall as TPP Bounces Back From Trump’s Blow (1)

(Bloomberg) — As negotiators race to wrap up a 16-nation Asia trade pact they face a new and unexpected threat — momentum in a rival trade deal that nine months ago appeared doomed.

When President Donald Trump abandoned the U.S.-led Trans-Pacific Partnership shortly after taking office, nations turned their focus to the Regional Comprehensive Economic Partnership. Now, remaining TPP members are making a concerted effort to resurrect that deal, while progress stalls on the RCEP.

The goal of an agreement by end-year on the RCEP, which includes China, India and Japan, but not the U.S., won’t be met, according to its chief negotiator. Still, for Iman Pambagyo the bigger concern is some RCEP members may exit the deal to prioritize the TPP, a pact that doesn’t include China and was seen as a hedge against its growing clout in Asia.

“Perhaps down the road, toward the end of the year, someone will say, ‘That’s enough for me. We’re not joining at this point. We will join on some other date,’” Pambagyo said in an interview Tuesday in Jakarta. It’s possible the pact could lose two to three members, he said, without naming those countries at risk of leaving.

“As the chair of the trade negotiation committee, I will work on the basis of my mandate: to keep everyone on board and find a possible solution that is agreeable to all,” he said. “Otherwise, it will be difficult for us to conclude this negotiation.”

TPP Proposal

The move by Trump to rip up the TPP, his predecessor’s landmark trade policy, signaled a more protectionist administration and pivoted attention to the RCEP. But some of the remaining 11 TPP nations — mostly Australia, Japan and New Zealand — are now pushing hard to keep it going.

Trade ministers from TPP group are due to present their proposal for the future of the deal to leaders at the Asia-Pacific Economic Cooperation summit in Da Nang, Vietnam.

“We’re all committed to working towards trying to have something for Da Nang in November,” Australian Trade Minister Steve Ciobo said in an interview Wednesday in Jakarta. “That’s the objective.”

China’s perception is that the RCEP talks are hitting difficulties with Japan in ways that indicate it is less keen to push the deal through, according to an official with direct knowledge of the talks who asked not to be identified speaking about private conversations. 

High Standards

In negotiations over customs duties and so-called “invisible…

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